Average commercial rents are down 27% in SoHo, according to the Real Estate Board of New York, which could attract new restaurants and help make the area more of a destination.

After years of relentless increases, commercial rents are finally falling in some of Manhattan’s major shopping districts, paving the way for some exciting transformations.

Since the spring of last year, average asking rents dropped in nine of the borough’s 17 major retail corridors, with the biggest drop of 27% on Broadway between Broome and Houston streets in SoHo, according to a recent report from the Real Estate Board of New York (REBNY).

REBNY senior vice president Michael Slattery said that, for the most part, landlords are lowering rents to fill vacancies and help brick-and-mortar shops cope with competition from online shopping.

“[Property] owners are starting to realize that they need to adjust their ask in order to attract activity,” he said.

Landlords are also more likely to offer short-term leases to allow pop-up shops to test markets and see if they’d like to stay for ten years or more, Slattery added.

The REBNY report also found that major retailers are leaning more toward quality over quantity, opening one large space versus various smaller locations, and using new technologies like robotics and data mining to attract customers. For example, Nike is consolidating to open a massive 69,000-square-foot flagship location at 52nd Street and Fifth Avenue in early 2019.

Down on Broadway in SoHo, a lack of attractions like restaurants and museums prevents it from being a hot destination, which in turn makes it less attractive to new retailers, noted Jared Epstein, vice president of Aurora Capital Associates, which owns several properties in the area.

“Without having cultural establishments and places for people to gather and have a meal, it causes a lack of interest from consumers,” Epstein said. “There’s not much to do [in SoHo] except shop.” The retail district needs to become more like the Meatpacking District, where Aurora also owns properties and has no problem filling vacancies, he said.

From the High Line park to the Whitney Museum of American Art and scores of places to eat and drink, tourists and New Yorkers alike have plenty to do in the area, and retailers thrive off the foot traffic. According to a report from the brokerage Cushman & Wakefield, Meatpacking property owners are doing so well that commercial rents rose 1.8% there since last spring.

Epstein said he hopes that lower rents and short-term leases in SoHo will lead to a revitalization. “It’s going to bring SoHo back,” he said.

Uptown on Madison Avenue, where REBNY found that rents dropped 4% year-over-year between East 57th and 72nd streets, more than a dozen new businesses opened recently, from shops like Alexandre Birman to galleries like Carlton Fine Arts.

And more are coming to the strip, including Ralph & Russo, which designed Meghan Markle’s engagement-photo dress, and Aquatalia, one of Kate Middleton’s favorite shoe designers, Madison Avenue Business Improvement District president Matthew Bauer said.

Dropping rents aren’t the only factor enticing new businesses, however, he said. Luxury brands like to be near each other so consumers can do all their shopping in one outing.

“They’re opening because they feel the market that is here on Madison Avenue is a market that would make their business thrive,” Bauer said.

He added that Upper East Siders alone provide enough foot traffic for businesses on Madison. “It’s a residential nabe that has considerable buying power and likes to shop local,” Bauer said. “Stores want to tap into that local market and to be in a place where there are many [similar] businesses.”

Retail Rent Snapshot

Here are the average rent decreases in nine of Manhattan’s commercial corridors between the spring of 2017 and 2018, according to REBNY:

Broadway between Houston and Broome streets: -27% to $595

Third Avenue between 60th and 72nd streets: -26% to $264

West 34th street between Fifth and Seventh avenues: -18% to $604

Columbus Avenue between 66th and 79th streets: -12% to $304

Bleecker Street between Seventh Avenue South and Hudson Street: -11% to $332

After growing up in Queens and going to high school on the Upper West Side of Manhattan, I started my journalism career as a state politics reporter in Albany, New York. I later became an editor at amNewYork, New York City’s largest daily newspaper, where I covered everythi...